Cheques (again)

[Kathian]

I sent my daughter a cheque which she put in her bank on 23rd Oct. The money came out of my bank on 26th Oct but the money is still not available to her. Where is it?

[staff help]

the cheque chould have cleared in your daughters account the same day as it was taken out of yours unless she holds a business account then it is usually a few days later - I would check with your bank to ensure that it was paid into the correct account - good luck

[sammy snake]

It depends on where you paid it in.  Cheques are generally cleared through APACS in 3 days. (Automated Payment Clearing System).  however as most building societies do not hold accounts with APACS, so they have to pay cheques into a bank account with a major Bank and have them cleared that way.  Therefore if you pay a cheque into a building society, they then have to pay it into their Bank account. It will take at least three days to come back if it is unpaid and then it will be returned to the head office of the building society in question.  They then have to process it through their own system before debiting the appropriate account.  Thats why they always take longer to clear cheques than Banks do.  Hope that makes sense!

[Kathian]

Thanks for the answers. I am amazed that years ago (when we only had pen and paper) a cheque was cleared within three days and now, with all this technology, it takes longer!

[stevie21]

The money being available to your daughter happens after a fixed time determined by her bank : mine does it on the 4th working day (including the day I've paid it in). When the cheque actually clears can happen before or after this - if it's after then you both earn interest on the same money. The money isn't something that exists physically so it can be in 2 places at once (or neither) - it's just a process or debiting one account and crediting another.

[Oneeyedvic]

On Monday (for example), cheque will be sent to the clearing centre, arriving in the early hours of tuesday morning. At the centre the cheques are mechanically read and sorted, and codeline and amount details are sent electronically to the banks on which the cheques are drawn by 11am on Tueday. The physical cheque is then batched up with others drawn on accounts at the same bank and handed over to the paying bank at the exchange centre.

 

The paying bank then debits the account on wednesday morning and the payee's account is credited. At the same time, all banks calculate the amount they must pay to, or receive from, each other on the basis of the cheques exchanged the previous day. The net balances are then settled accross accounts held at the Bank of England. This is the end of the clearing process  but banks say they need an extra day or two to ensure cheques are not forged or incorrectly filled out, or to stop payment if the issuer makes such a request

 

[Oneeyedvic]

It is also worth noting that each bank has its own policy. Some banks (Barclays) will let you draw up to �1000.00 on the day you bank the cheque. Halifax take 4-6 days on certain accounts.

 

The Office of Fair Trading are looking into the process, but since cheque useage is in decline it is doubtful if anything will happen